##### Table of Contents



SECURITIES AND EXCHANGE
    COMMISSION
 450 Fifth Street, N.W.
 Washington, D.C.
    20549
   Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended June
    30, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File
    No. 000-51557
  Investors Bancorp,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

22-3493930(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)   101 JFK Parkway, Short Hills,
    New Jersey

07078(Address of Principal Executive
    Offices)

Zip Code   (973) 924-5100 (Registrants
    telephone number)
  Securities registered pursuant to Section 12(b) of the
    Act:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
 Common Stock, par value $0.01 per share
 (Title of
    Class)
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



INVESTORS
    BANCORP, INC.
  2007
    ANNUAL REPORT ON
    FORM 10-K
  TABLE OF
    CONTENTS
  
  PagePART IItem 1.


Business


1Item 1A.


Risk
    Factors


33Item 1B.


Unresolved Staff
    Comments


36Item 2.


Properties


36Item 3.


Legal
    Proceedings


36Item 4.


Submission of
    Matters to a Vote of Security Holders


36PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


37Item 6.


Selected Financial
    Data


39Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


40Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


57Item 8.


Financial
    Statements and Supplementary Data


57Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


57Item 9A.


Controls and
    Procedures


57Item 9B.


Other
    Information


57PART IIIItem 10.


Directors,
    Executive and Corporate Governance


58Item 11.


Executive
    Compensation


58Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


58Item 13.


Certain
    Relationships, Related Transactions and Director
    Independence


58Item 14.


Principal
    Accountant Fees and Services


58PART IVItem 15.


Exhibits and
    Financial Statement Schedules


58SIGNATURES


96EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32: CERTIFICATION




---



##### Table of Contents



PART I  Forward
    Looking Statements
      ITEM 1.
    BUSINESS  Investors
    Bancorp, Inc.
         1




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##### Table of Contents



Investors
    Savings Bank
  General
  (973) 924-5100.
    Market
    Area
      Competition
     2




---



##### Table of Contents



Lending
    Activities
    Loan Portfolio Composition.
  At June 30,2007


2006


2005


2004


2003Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Residential mortgage
    loans:One- to four-family

$
3,134,690



87.69
%

$
2,646,056



89.75
%

$
1,850,806



93.18
%

$
987,958



89.26
%

$
652,532



83.41
%FHA


18,522



0.52



20,503



0.70



30,273



1.52



43,923



3.97



67,633



8.65Total residential mortgage loans


3,153,212



88.21



2,666,559



90.45



1,881,079



94.70



1,031,881



93.23



720,165



92.06Multi-family and
    commercial


107,350



3.00



76,976



2.61



17,181



0.86



6,147



0.56



7,011



0.90Construction loans


152,670



4.27



65,459



2.22



6,465



0.33



845



0.08



145



0.02Consumer and other
    loans:Home equity loans


138,358



3.87



112,977



3.83



45,591



2.30



29,731



2.69



21,948



2.81Home equity credit lines


21,269



0.60



24,770



0.84



34,840



1.75



36,513



3.30



31,321



4.00Other


1,768



0.05



1,589



0.05



1,210



0.06



1,588



0.14



1,620



0.21Total consumer and other loans


161,395



4.52



139,336



4.72



81,641



4.11



67,832



6.13



54,889



7.02Total loans

$
3,574,627



100.00
%

$
2,948,330



100.00
%

$
1,986,366



100.00
%

$
1,106,705



100.00
%

$
782,210



100.00
%Premiums on purchased loans


23,587







20,327







14,113







5,274







1,694Deferred loan fees, net


(1,924
)






(1,734
)






(881
)






(905
)






(703
)Allowance for loan losses


(6,917
)






(6,340
)






(5,694
)






(5,193
)






(4,750
)Net loans

$
3,589,373






$
2,960,583






$
1,993,904






$
1,105,881






$
778,451  3




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##### Table of Contents



Loan Portfolio Maturities and Yields.
  At June 30, 2007Multi-Family





Consumerand


Construction


and OtherResidential Mortgage


Commercial


Loans


Loans


Total(In thousands)Amounts Due:One year or less

$
307



355



44,182



188



45,032After one year:One to three years


1,092



6,104



97,220



3,181



107,597Three to five years


291



26,184



8,217



8,544



43,236Five to ten years


49,982



56,753



3,051



30,987



140,773Ten to twenty years


527,217



13,663







87,259



628,139Over twenty years


2,574,323



4,291







31,236



2,609,850Total due after one year


3,152,905



106,995



108,488



161,207



3,529,595Total loans

$
3,153,212



107,350



152,670



161,395



3,574,627Premiums on purchased loans


















23,587Deferred loan fees, net


















(1,924
)Allowance for loan losses


















(6,917
)Net loans

















$
3,589,373     Due After June 30, 2008Fixed


Adjustable


Total(In thousands)Residential mortgage
    loans:One- to four-family

$
1,817,457



1,317,044



3,134,501FHA


18,404







18,404Total residential mortgage loans


1,835,861



1,317,044



3,152,905Multi-family and
    commercial


58,409



48,586



106,995Construction loans


100,802



7,686



108,488Consumer and other
    loansHome equity loans


138,151







138,151Home equity credit lines






21,261



21,261Other


1,516



279



1,795Total consumer and other loans


139,667



21,540



161,207Total loans

$
2,134,739



1,394,856



3,529,595   Residential Mortgage Loans.
 4




---



##### Table of Contents



due-on-sale
  Consumer Loans. The Wall Street
    Journal
  Multi-family and Commercial Real Estate
    Loans.
   5




---



##### Table of Contents



Construction Loans.
      Loan Originations, Purchases, Participations and Servicing of
    Loans.
   6




---



##### Table of Contents



For the Years Ended June 30,2007


2006


2005(In thousands)Loan originations and
    purchases:Loan originations:Residential mortgage loans:One- to four-family

$
153,897


$
226,955


$
239,384FHA










326Total residential mortgage loans


153,897



226,955



239,710Multi-family and commercial


36,862



66,786



10,781Construction loans


116,250



94,965



5,324Consumer and other loans:Home equity loans


49,189



80,870



23,309Home equity credit lines


18,442



16,396



5,029Other


2,728



1,817



652Total consumer and other loans


70,359



99,083



28,990Total loan originations


377,368



487,789



284,805Loan purchases:Residential mortgage loans:One- to four-family


664,384



833,449



856,557FHA










767Total loan purchases


664,384



833,449



857,324Loan principal repayments


(410,533
)


(351,899
)


(252,113
)Other items, net(1)


(2,429
)


(2,660
)


(1,993
)Net increase in loan portfolio

$
628,790


$
966,679


$
888,023     (1)
    
    Other items include charge-offs and amortization and accretion
    of; deferred fees and expenses and discounts and premiums    Loan Approval Procedures and Authority.
 7




---



##### Table of Contents



Loans to One Borrower.
  Asset
    Quality
    Collection Procedures.
 8




---



##### Table of Contents



Delinquent Loans.
  Loans Delinquent for60-89 Days


90 Days and Over


TotalNumber


Amount


Number


Amount


Number


Amount(Dollars in thousands)At June 30, 2007Residential mortgage loans:One- to four-family


7


$
628



12


$
2,220



19


$
2,848FHA


2



263



14



1,300



16



1,563Total residential mortgage loans


9



891



26



3,520



35



4,411Multi-family and commercial


1



579



3



452



4



1,031Construction loans










1



1,146



1



1,146Consumer and other loans:Home equity loans


1



7



1



28



2



35Home equity credit lines


1



40











1



40Other


1



1



4



3



5



4Total consumer and other loans


3



48



5



31



8



79Total


13


$
1,518



35


$
5,149



48


$
6,667At June 30, 2006Residential mortgage loans:One- to four-family


5


$
626



11


$
1,346



16


$
1,972FHA


7



682



15



1,440



22



2,122Total residential mortgage loans


12



1,308



26



2,786



38



4,094Multi-family and commercial










3



477



3



477Construction loans






















Consumer and other loans:Home equity loans










1



6



1



6Home equity credit lines










1



30



1



30Other


4



51











4



51Total consumer and other loans


4



51



2



36



6



87Total


16


$
1,359



31


$
3,299



47


$
4,658 9




---



##### Table of Contents



Loans Delinquent for60-89 Days


90 Days and Over


TotalNumber


Amount


Number


Amount


Number


Amount(Dollars in thousands)At June 30, 2005Residential mortgage loans:One- to four-family


3


$
359



21


$
3,237



24


$
3,596FHA


1



119



34



3,825



35



3,944Total residential mortgage loans


4



478



55



7,062



59



7,540Multi-family and commercial










4



608



4



608Construction loans






















Consumer and other loans:Home equity loans


1



33



3



193



4



226Home equity credit lines


1



40











1



40Other


4



3



2



2



6



5Total consumer and other loans


6



76



5



195



11



271Total


10


$
554



64


$
7,865



74


$
8,419   Non-Performing Assets.
  At June 30,2007


2006


2005


2004


2003(Dollars in thousands)Non-accrual loans:Residential mortgage loans:One- to four-family

$
2,220


$
1,346


$
3,237


$
3,021


$
3,786FHA


1,300



1,440



3,825



5,559



6,324Total residential mortgage loans


3,520



2,786



7,062



8,580



10,110Multi-family and commercial


452



477



608



437



451Construction loans


1,146















Consumer and other loans:Home equity loans


28



6



193



18



24Home equity credit lines






30







30



110Other


3







2



1



2Total consumer and other loans


31



36



195



49



136Total


5,149



3,299



7,865



9,066



10,697Total non-performing loans


5,149



3,299



7,865



9,066



10,697Real estate owned














154



110Total non-performing assets

$
5,149


$
3,299


$
7,865


$
9,220


$
10,807Total non-performing loans to
    total loans


0.14
%


0.11
%


0.40
%


0.82
%


1.37
%Total non-performing loans to
    total assets


0.09
%


0.06
%


0.16
%


0.17
%


0.20
%Total non-performing assets to
    total assets


0.09
%


0.06
%


0.16
%


0.17
%


0.20
%  10




---



##### Table of Contents



Real Estate Owned.
  Classified Assets.
      Allowance
    for Loan Losses
     11




---



##### Table of Contents



Allowance for Loan Losses.
  At or for the Years Ended June 30,2007


2006


2005


2004


2003(Dollars in thousands)Allowance balance (beginning of
    period)

$
6,340


$
5,694


$
5,193


$
4,750


$
4,320Provision for loan losses


725



600



600



600



600Charge-offs:Residential mortgage loansOne- to four-family










3



18



56FHA


141



143



108



276



Total residential mortgage loans


141



143



111



294



56Multi-family and commercial loans


















384Construction loans


















Consumer and other loans


10



10



14



12



8Total charge-offs


151



153



125



306



448Recoveries:Residential mortgage loansOne- to four-family










25



28



FHA






196











Total residential mortgage loans






196



25



28



Multi-family and commercial loans














109



275Construction loans


















Consumer and other loans


3



3



1



12



3Total recoveries


3



199



26



149



278Net (charge-offs) recoveries


(148
)


46



(99
)


(157
)


(170
)Allowance balance (end of period)

$
6,917


$
6,340


$
5,694


$
5,193


$
4,750Total loans outstanding

$
3,574,627


$
2,948,330


$
1,986,366


$
1,106,705


$
782,210Average loans outstanding


3,269,196



2,427,506



1,502,704



895,759



889,599Allowance for loan losses as a
    percent of total loans outstanding


0.19
%


0.22
%


0.29
%


0.47
%


0.61
%Net loans charged off as a percent
    of average loans outstanding



%



%


(0.01
)%


(0.02
)%


(0.02
)%Allowance for loan losses to
    non-performing loans


134.33
%


192.18
%


72.40
%


57.29
%


44.40
%  12




---



##### Table of Contents



Allocation of Allowance for Loan Losses.
  At June 30,2007


2006


2005Percent of





Percent of





Percent ofLoans in Each





Loans in Each





Loans in EachAllowance for


Category to


Allowance for


Category to


Allowance for


Category toLoan Losses


Total Loans


Loan Losses


Total Loans


Loan Losses


Total Loans(Dollars in thousands)End of period allocated
    to:Residential mortgage loans:One- to four-family

$
3,302



87.69
%

$
2,756



89.75
%

$
3,749



93.18
%FHA


127



0.52



139



0.70



485



1.52Total residential mortgage loans


3,429



88.21
%


2,895



90.45
%


4,234



94.70
%Multi-family and commercial


943



3.00
%


1,583



2.61
%


703



0.86
%Construction loans


1,894



4.27
%


818



2.22
%


26



0.33
%Consumer and other loans:Home equity loans


208



3.87
%


282



3.83
%


136



2.30
%Home equity credit lines


32



0.60



64



0.84



105



1.75Other


3



0.05



4



0.05



4



0.06Total consumer and other loans


243



4.52
%


350



4.72
%


245



4.11
%Unallocated


408







694







486Total allowance

$
6,917



100.00
%

$
6,340



100.00
%

$
5,694



100.00
%   At June 30,2004


2003Percent of





Percent ofLoans in Each





Loans in EachAllowance for


Category to


Allowance for


Category toLoan Losses


Total Loans


Loan Losses


Total Loans(Dollars in thousands)End of period allocated
    to:Residential mortgage loans:One- to four-family

$
2,979



89.26
%

$
1,983



83.41
%FHA


429



3.97



597



8.65Total residential mortgage loans


3,408



93.23
%


2,580



92.06
%Multi-family and commercial


878



0.56
%


1,059



0.90
%Construction loans


4



0.08
%


1



0.02
%Consumer and other loans:Home equity loans


89



2.69
%


66



2.81
%Home equity credit lines


110



3.30



94



4.00Other


4



0.14



5



0.21Total consumer and other loans


203



6.13
%


165



7.02
%Unallocated


700







945Total allowance

$
5,193



100.00
%

$
4,750



100.00
%  13




---



##### Table of Contents



Security
    Investments
      and/or
    Mortgage-Backed Securities.
   14




---



##### Table of Contents



Corporate and Other Debt Securities.
  Government Sponsored Enterprises.
  Marketable Equity Securities.
 15




---



##### Table of Contents



Securities Portfolios.
  Securities
    Held-to-Maturity
  At June 30,2007


2006


2005Amortized


Estimated


Amortized


Estimated


Amortized


EstimatedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(In thousands)Debt securities:Government Sponsored Enterprises

$
119,900


$
115,675


$
120,062


$
113,656


$
120,633


$
119,646Municipal bonds


14,048



14,236



14,177



14,378



18,220



18,712Corporate and other debt securities


166,074



165,897



130,111



129,739



8,000



7,985300,022



295,808



264,350



257,773



146,853



146,343Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


641,452



618,414



808,952



775,443



1,072,121



1,065,872Government National Mortgage
    Association


6,049



6,222



8,249



8,442



16,465



16,932Federal National Mortgage
    Association


438,830



425,004



527,338



507,462



612,556



611,801Federal housing authorities


3,027



3,251



3,189



3,442



3,336



3,775Non-agency securities


128,284



123,686



150,954



143,413



189,551



188,216Total mortgage-backed securities
    held-to-maturity


1,217,642



1,176,577



1,498,682



1,438,202



1,894,029



1,886,596Total securities held-to-maturity

$
1,517,664


$
1,472,385


$
1,763,032


$
1,695,975


$
2,040,882


$
2,032,939   Securities
    Available-for-Sale
  At June 30,2007


2006


2005Amortized


Estimated


Amortized


Estimated


Amortized


EstimatedCost


Fair Value


Cost


Fair Value


Cost


Fair Value(In thousands)Equity securities

$



$



$
35,000


$
35,035


$
35,000


$
34,825Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


68,635



67,223



124,845



120,764



156,162



155,106Federal National Mortgage
    Association


70,059



68,856



208,545



201,794



262,644



262,336Non-agency securities


119,598



115,891



178,446



171,283



223,861



221,684Total mortgage-backed securities
    available for sale


258,292



251,970



511,836



493,841



642,667



639,126Total securities available-for-sale

$
258,292


$
251,970


$
546,836


$
528,876


$
677,667


$
673,951    16




---



##### Table of Contents



Portfolio Maturities and Yields.
  More than One Year


More than Five YearsOne Year or Less


through Five Years


through Ten Years


More than Ten Years


Total SecuritiesWeighted





Weighted





Weighted





Weighted








WeightedAmortized


Average


Amortized


Average


Amortized


Average


Amortized


Average


Amortized





AverageCost


Yield


Cost


Yield


Cost


Yield


Cost


Yield


Cost


Fair Value


Yield(Dollars in thousands)Held to Maturity:Debt securities:Government Sponsored Enterprises

$





%

$
65,120



4.07
%

$
54,000



4.90
%

$
780



6.25
%

$
119,900


$
115,675



4.46
%Municipal bonds


1,850



6.45
%


1,165



6.20
%


5,163



7.12
%


5,870



8.85
%


14,048



14,236



7.68
%Corporate and other debt securities







%







%







%


166,074



6.79
%


166,074



165,897



6.79
%1,850



6.45
%


66,285



4.11
%


59,163



5.09
%


172,724



6.86
%


300,022



295,808



5.90
%Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation







%







%


102,924



4.29
%


538,528



4.57
%


641,452



618,414



4.52
%Government National Mortgage
    Association







%







%


2



10.00
%


6,047



7.22
%


6,049



6,222



7.22
%Federal National Mortgage
    Association







%







%


32,746



5.39
%


406,084



5.02
%


438,830



425,004



5.05
%Federal and state housing
    authorities







%







%


3,027



8.89
%







%


3,027



3,251



8.89
%Non-agency securities







%







%







%


128,284



4.86
%


128,284



123,686



4.86
%Total mortgage-backed securities







%







%


138,699



4.65
%


1,078,943



4.79
%


1,217,642



1,176,577



4.77
%Total securities held-to-maturity

$
1,850



6.45
%

$
66,285



4.11
%

$
197,862



4.78
%

$
1,251,667



5.07
%

$
1,517,664


$
1,472,385



5.00
%Available for Sale:Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation







%







%


9,253



4.00
%


59,382



4.69
%


68,635



67,223



4.59
%Federal National Mortgage
    Association







%







%


23,784



4.00
%


46,275



4.78
%


70,059



68,856



4.52
%Non-agency securities







%







%







%


119,598



4.65
%


119,598



115,891



4.65
%Total mortgage-backed securities







%







%


33,037



4.00
%


225,255



4.68
%


258,292



251,970



4.60
%Total securities available-for-sale

$





%

$





%

$
33,037



4.00
%

$
225,255



4.68
%

$
258,292


$
251,970



4.60
%   17




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##### Table of Contents



Sources
    of Funds
  General.
  Deposits.
        At June 30,2007


2006Percent of


Weighted





Percent of


WeightedTotal


Average





Total


AverageBalance


Deposits


Rate


Balance


Deposits


Rate(Dollars in thousands)Savings

$
320,880



8.76
%


2.30
%

$
226,245



6.85
%


0.83
%Checking accounts


388,215



10.59



2.39



349,014



10.57



2.08Money market deposits


182,274



4.97



2.37



212,200



6.43



1.56Total transaction accounts


891,369



24.32



2.35



787,459



23.85



1.58Certificates of deposit


2,773,597



75.68



5.06



2,514,584



76.15



4.06Total deposits

$
3,664,966



100.00
%


4.40
%

$
3,302,043



100.00
%


3.47
%   18




---



##### Table of Contents



At June 30,2005Percent of


WeightedTotal


AverageBalance


Deposits


Rate(Dollars in thousands)Savings

$
271,071



8.36
%


0.83
%Checking


277,317



8.56



1.30Money market deposits


318,432



9.83



1.32Total transaction accounts


866,820



26.75



1.16Certificates of deposit


2,373,600



73.25



2.87Total deposits

$
3,240,420



100.00
%


2.42
%     At June 30,2007


2006


2005(Dollars in thousands)Certificates of
    DepositsLess than 2%

$
5,353


$
32,225


$
446,4212.01% - 3.00%


18,317



116,330



757,5763.01% - 4.00%


432,054



870,358



987,3204.01% - 5.00%


1,047,943



1,325,226



162,2705.01% - 6.00%


1,268,741



170,435



20,013Over 6.00%


1,189



10



Total

$
2,773,597


$
2,514,584


$
2,373,600     Within


Over


Over Six


Over One


Over Two


OverThree


Three to


Months to


Year to Two


Years to


ThreeMonths


Six Months


One Year


Years


Three Years


Years


Total(Dollars in thousands)Certificates of
    DepositsLess than 2%

$
5,205


$
85


$
46


$



$
17


$



$
5,3532.01% - 3.00%


4,381



3,879



7,139



2,918











18,3173.01% - 4.00%


82,653



88,612



93,506



155,391



10,689



1,203



432,0544.01% - 5.00%


405,306



220,076



253,714



93,661



42,580



32,606



1,047,9435.01% - 6.00%


574,757



364,418



233,692



79,751



548



15,575



1,268,741Over 6.00%


1,187







2















1,189Total

$
1,073,489


$
677,070


$
588,099


$
331,721


$
53,834


$
49,384


$
2,773,597  19




---



##### Table of Contents



AtJune 30, 2007(In thousands)Three months or less

$
288,777Over three months through six
    months


187,392Over six months through one year


138,140Over one year


101,747Total

$
716,056   Borrowings.
      At or for the Years Ended June 30,2007


2006


2005(Dollars in thousands)Balance at end of period

$
333,710


$
150,740


$
88,769Average balance during period


196,417



107,317



25,402Maximum outstanding at any month
    end


333,710



190,255



88,769Weighted average interest rate at
    end of period


5.42
%


5.36
%


3.49
%Average interest rate during period


5.46
%


4.30
%


2.80
%     At or for the Years Ended June 30,2007


2006


2005(Dollars in thousands)Balance at end of period

$
705,000


$
1,095,000


$
1,225,000Average balance during period


925,280



1,008,406



1,475,269Maximum outstanding at any month
    end


1,095,000



1,160,000



1,673,000Weighted average interest rate at
    end of period


4.78
%


4.69
%


3.53
%Average interest rate during period


4.80
%


4.03
%


3.80
%   Subsidiary
    Activities
    ISB Mortgage Company LLC.
 20




---



##### Table of Contents



ISB Asset Corporation.
  ISB Holdings, Inc.
    Personnel
    SUPERVISION
    AND REGULATION
  General
        Form 10-K.
 21




---



##### Table of Contents



New
    Jersey Banking Regulation
  Activity Powers.
  
    real estate mortgages;
    consumer and commercial loans;
    specific types of debt securities, including certain corporate
    debt securities and obligations of federal, state and local
    governments and agencies;
    certain types of corporate equity securities; and
    certain other assets.    Loans-to-One-Borrower Limitations.
  Dividends.
  Minimum Capital Requirements.
  Examination and Enforcement.
  Federal
    Banking Regulation
  Capital Requirements.
    
    common stockholders equity, excluding the unrealized
    appreciation or depreciation, net of tax, from available for
    sale securities; 22




---



##### Table of Contents




    non-cumulative perpetual preferred stock, including any related
    retained earnings; and
    minority interests in consolidated subsidiaries minus all
    intangible assets, other than qualifying servicing rights and
    any net unrealized loss on marketable equity securities.    
    cumulative perpetual preferred stock;
    certain perpetual preferred stock for which the dividend rate
    may be reset periodically;
    hybrid capital instruments, including mandatory convertible
    securities;
    term subordinated debt;
    intermediate term preferred stock;
    allowance for loan losses; and
    up to 45% of pretax net unrealized holding gains on available
    for sale equity securities with readily determinable fair market
    values.      case-by-case
  
    the quality of the banks interest rate risk management
    process;
    the overall financial condition of the bank; and
    the level of other risks at the bank for which capital is needed.    As of June 30, 2007Historical


Percent ofCapital


Assets(1)(Dollars in thousands)Core capital

$
686,487



12.50
%Tier 1 risk-based capital


686,487



24.75Total risk-based capital


693,404



25.00     (1)
    
    For purposes of calculating Core capital, assets are based on
    adjusted total leverage assets. In calculating Tier 1
    risk-based capital and total risk-based capital, assets are
    based on total risk-weighted assets. 23




---



##### Table of Contents



Activity Restrictions on State-Chartered
    Banks.
      Federal Home Loan Bank System.
   24




---



##### Table of Contents



Enforcement.
  Prompt Corrective Action.
    
    its ratio of total capital to risk-weighted assets is at least
    10%;
    its ratio of Tier 1 capital to risk-weighted assets is at
    least 6%; and
    its ratio of Tier 1 capital to total assets is at least 5%,
    and it is not subject to any order or directive by the FDIC to
    meet a specific capital level.    
    its ratio of total capital to risk-weighted assets is at least
    8%; or
    its ratio of Tier 1 capital to risk-weighted assets is at
    least 4%; and
    its ratio of Tier 1 capital to total assets is at least 4%
    (3% if the bank receives the highest rating under the Uniform
    Financial Institutions Rating System) and it is not a
    well-capitalized institution.    
    its total risk-based capital is less than 8%; or
    its Tier 1 risk-based-capital is less than 4%; and
    its leverage ratio is less than 4%.    
    its total risk-based capital is less than 6%;
    its Tier 1 capital is less than 3%; or
    its leverage ratio is less than 3%.      
    insolvency, or when a assets of the bank are less than its
    liabilities to depositors and others;
    substantial dissipation of assets or earnings through violations
    of law or unsafe or unsound practices;
    existence of an unsafe or unsound condition to transact business;
    likelihood that the bank will be unable to meet the demands of
    its depositors or to pay its obligations in the normal course of
    business; and
    insufficient capital, or the incurring or likely incurring of
    losses that will deplete substantially all of the
    institutions capital with no reasonable prospect of
    replenishment of capital without federal assistance. 25




---



##### Table of Contents



Deposit Insurance.
        notice-and-comment
      Transactions with Affiliates of Investors Savings
    Bank.
 26




---



##### Table of Contents




    limits the extent to which a bank or its subsidiaries may engage
    in covered transactions with any one affiliate to an
    amount equal to 10% of such banks capital stock and
    retained earnings, and limits all such transactions with all
    affiliates to an amount equal to 20% of such capital stock and
    retained earnings; and
    requires that all such transactions be on terms that are
    consistent with safe and sound banking practices.    Prohibitions Against Tying Arrangements.
  Privacy Standards.
      Community Reinvestment Act and Fair Lending
    Laws.
  
    a lending test, to evaluate the institutions record of
    making loans in its service areas;
    an investment test, to evaluate the institutions record of
    investing in community development projects, affordable housing,
    and programs benefiting low or moderate income individuals and
    businesses; and
    a service test, to evaluate the institutions delivery of
    services through its branches, ATMs and other offices.     27




---



##### Table of Contents



Loans to
    a Banks Insiders
  Federal Regulation.
      New Jersey Regulation.
  Federal
    Reserve System
    The USA
    Patriot Act
   28




---



##### Table of Contents



Sarbanes-Oxley
    Act of 2002
    Holding
    Company Regulation
  Federal Regulation.
       29




---



##### Table of Contents




    making or servicing loans;
    performing certain data processing services;
    providing discount brokerage services; or acting as fiduciary,
    investment or financial advisor;
    leasing personal or real property;
    making investments in corporations or projects designed
    primarily to promote community welfare; and
    acquiring a savings and loan association.    
    each of its depository institution subsidiaries is well
    capitalized;
    each of its depository institution subsidiaries is well
    managed;
    each of its depository institution subsidiaries has at least a
    satisfactory Community Reinvestment Act rating at
    its most recent examination; and
    the bank holding company has filed a certification with the
    Federal Reserve Board stating that it elects to become a
    financial holding company.        Conversion of Investors Bancorp, MHC to Stock
    Form.
 30




---



##### Table of Contents



New Jersey Regulation.
  Acquisition of Investors Bancorp, Inc.
  Federal Securities Laws.
    TAXATION
  Federal
    Taxation
  General.
  Method of Accounting.
  Bad Debt Reserves.
 31




---



##### Table of Contents



Taxable Distributions and Recapture.
    Alternative Minimum Tax.
  Net Operating Loss Carryforwards and Charitable Contribution
    Carryforward.
    Corporate Dividends-Received
    Deduction.
  State
    Taxation
  New Jersey State Taxation.
   32




---



##### Table of Contents



Delaware State Taxation.
  ITEM 1A.
    RISK
    FACTORS  Our
    Liabilities Reprice Faster Than Our Assets and Future Increases
    in Interest Rates Will Reduce Our Profits.
    
    the interest income we earn on our interest-earning assets, such
    as loans and securities; and
    the interest expense we pay on our interest-bearing liabilities,
    such as deposits and borrowings.    and/or
     33




---



##### Table of Contents



There
    Is No Assurance That Our Strategy to Change the Mix of Our
    Assets and Liabilities Will Succeed.
    Our
    Inability to Achieve Profitability on New Branches May
    Negatively Affect Our Earnings.
  de novo
  Because
    We Intend to Continue to Increase Our Commercial Real Estate
    Originations, Our Lending Risk Will Increase.
    A
    Downturn in the New Jersey Economy or a Decline in Real Estate
    Values Could Reduce Our Profits.
    If Our
    Allowance for Loan Losses is Not Sufficient to Cover Actual Loan
    Losses, Our Earnings Could Decrease.
   34




---



##### Table of Contents



Our
    Return on Equity Has Been Low Compared to Other Financial
    Institutions. This Could Negatively Affect the Price of Our
    Common Stock.
    Strong
    Competition Within Our Market Area May Limit Our Growth and
    Profitability.
    If We
    Declare Dividends on Our Common Stock, Investors Bancorp, MHC
    Will be Prohibited From Waiving the Receipt of Dividends by
    Current Federal Reserve Board Policy, Which May Result in Lower
    Dividends for All Other Stockholders.
    Investors
    Bancorp MHC Exercises Voting Control Over Investors Bancorp;
    Public Stockholders Own a Minority Interest
   35




---



##### Table of Contents



Future
    Acquisition Activity Could Dilute Book Value
  and/or
  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   36




---



##### Table of Contents



PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED
    STOCKHOLDERMATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES    Fiscal 2007


Fiscal 2006High


Low


Dividends


High


Low


DividendsFirst Quarter

$
15.48


$
13.16


$



$
n/a


$
n/a



n/aSecond Quarter


15.90



14.66







11.07



9.89



Third Quarter


15.81



14.24







14.49



10.99



Fourth Quarter


14.50



13.33







14.00



12.75



        37




---



##### Table of Contents



Stock
    Performance Graph
    INVESTORS
    BANCORP, INC.
  Total
    Return Performance
  
  Period Ending10/12/05

12/31/05

06/30/06

12/31/06

06/30/07Investors Bancorp


100.00



110.08



135.23



156.99



134.03SNL Bank and Thrift Index


100.00



110.59



116.36



129.22



123.80SNL Thrift Index


100.00



112.84



121.62



131.54



120.31       Total Number of


Maximum NumberShares Purchased


of Shares That MayTotal Number of


Average


as Part of Publicly


Yet Be PurchasedShares


Price Paid


Announced Plans


Under the Plans orPeriod

Purchased(1)(2)


per Share


or Programs


ProgramsApril 1, 2007 through
    April 30, 2007


390,000


$
14.06



390,000



71,295May 1, 2007 through
    May 31, 2007


695,000



14.12



695,000



4,162,126June 1, 2007 through
    June 30, 2007


532,400



13.76



532,400



3,629,726Total


1,617,400



13.99



1,617,400     (1)
    
    On September 25, 2006, the Company announced its intention
    to repurchase up to 10% of its publicly-held outstanding shares
    of common stock, or 5,317,590 shares. This plan was
    completed on May 10, 2007. 38




---



##### Table of Contents



(2)
    
    On April 26, 2007, the Company announced its second Share
    Repurchase Program, which authorized the purchase of an
    additional 10% of its publicly-held outstanding shares of common
    stock, or 4,785,831 shares. This stock repurchase program
    commenced upon the completion of the first program on
    May 10, 2007. This program has no expiration date and has
    3,629,726 shares yet to be purchased as of June 30,
    2007.   ITEM 6.
    SELECTED
    FINANCIAL DATA    At June 30,2007


2006


2005


2004


2003(In thousands)Selected Financial Condition
    Data:Total assets

$
5,601,088


$
5,497,246


$
4,992,753


$
5,318,140


$
5,352,404Loans receivable, net


3,589,373



2,960,583



1,993,904



1,105,881



778,451Loans held-for-sale


3,410



974



3,412



1,428



10,991Securities held to maturity, net


1,517,664



1,763,032



2,040,882



2,522,811



3,851,921Securities available for sale, at
    estimated fair value


251,970



528,876



673,951



1,421,073



303,525Bank owned life insurance


88,018



78,903



76,229



75,543



74,541Deposits


3,664,966



3,302,043



3,240,420



3,266,935



3,172,826Borrowed funds


1,038,710



1,245,740



1,313,769



1,604,798



1,744,827Stockholders equity


843,365



900,187



407,827



401,663



392,537   Years Ended June 30,2007(1)


2006(2)


2005(3)


2004


2003(In thousands)Selected Operating
    Data:Interest and dividend income

$
279,689


$
246,068


$
226,524


$
210,574


$
241,238Interest expense


193,398



141,796



126,679



127,558



158,121Net interest income


86,291



104,272



99,845



83,016



83,117Provision for loan losses


725



600



600



600



600Net interest income after
    provision for loan losses


85,566



103,672



99,245



82,416



82,517Non-interest income (loss)


2,843



5,580



(2,431
)


3,890



7,138Non-interest expenses


73,573



86,830



103,302



54,803



49,153Income (loss) before income tax
    expense (benefit)


14,836



22,422



(6,488
)


31,503



40,502Income tax (benefit) expense


(7,430
)


7,408



(3,346
)


11,666



12,232Net income (loss)

$
22,266


$
15,014


$
(3,142
)

$
19,837


$
28,270Earnings per share 
    basic and diluted(4)

$
0.20


$
0.06



n/a



n/a



n/a     (1)
    
    June 30, 2007 year end results reflect a $9.9 million
    reversal of previously established deferred tax asset valuation
    allowances.(2)
    
    June 30, 2006 year end results reflect a pre-tax
    expense of $20.7 million for the charitable contribution
    made to Investors Savings Bank Charitable Foundation as part of
    our IPO.(3)
    
    June 30, 2005 year end results reflect pre-tax expense
    of $54.0 million attributable to the March 2005 balance
    sheet restructuring.(4)
    
    Basic earnings per share for the year ended June 30, 2006
    include the results of operations from October 11, 2005,
    the date the Company completed its initial public offering.  39




---



##### Table of Contents



At or for the Years Ended June 30,2007


2006


2005


2004


2003Selected Financial Ratios and
    Other Data:Performance Ratios:Return on assets (ratio of net
    income or loss to average total assets)


0.40
%


0.29
%


(0.06
)%


0.37
%


0.52
%Return on equity (ratio of net
    income or loss to average equity)


2.52
%


2.00
%


(0.78
)%


5.00
%


7.56
%Net interest rate spread(1)


0.97
%


1.62
%


1.79
%


1.42
%


1.37
%Net interest margin(2)


1.61
%


2.04
%


1.97
%


1.58
%


1.56
%Efficiency ratio(3)


82.54
%


79.04
%


106.04
%


63.06
%


54.46
%Non-interest expenses to average
    total assets


1.33
%


1.65
%


1.98
%


1.02
%


0.90
%Average interest-earning assets to
    average interest-bearing liabilities


1.18
x


1.15
x


1.07
x


1.06
x


1.06xAsset Quality Ratios:Non-performing assets to total
    assets


0.09
%


0.06
%


0.16
%


0.17
%


0.20
%Non-performing loans to total loans


0.14
%


0.11
%


0.40
%


0.82
%


1.37
%Allowance for loan losses to
    non-performing loans


134.33
%


192.18
%


72.40
%


57.29
%


44.40
%Allowance for loan losses to total
    loans


0.19
%


0.22
%


0.29
%


0.47
%


0.61
%Capital Ratios:Risk-based capital (to
    risk-weighted assets)(4)


25.00
%


26.48
%


21.48
%


26.55
%


27.58
%Tier I risk-based capital (to
    risk-weighted assets)(4)


24.75
%


26.23
%


21.18
%


26.22
%


27.24
%Core capital (to average assets)(4)


12.50
%


12.25
%


8.28
%


7.69
%


7.12
%Equity to total assets


15.06
%


16.38
%


8.17
%


7.55
%


7.33
%Average equity to average assets


16.04
%


14.29
%


7.69
%


7.36
%


6.86
%Tangible capital (to tangible
    assets)


15.06
%


16.36
%


8.16
%


7.52
%


7.30
%Book value per common share

$
7.84


$
8.02



n/a



n/a



n/aOther Data:Number of full service offices


46



46



46



45



45Full time equivalent employees


475



473



459



443



455     (1)
    
    The net interest rate spread represents the difference between
    the weighted-average yield on interest-earning assets and the
    weighted- average cost of interest-bearing liabilities for the
    period.(2)
    
    The net interest margin represents net interest income as a
    percent of average interest-earning assets for the period.(3)
    
    The efficiency ratio represents non-interest expenses divided by
    the sum of net interest income and non-interest income.(4)
    
    Ratios are for Investors Savings Bank and do not include capital
    retained at the holding company level.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS     40




---



##### Table of Contents



41




---



##### Table of Contents



Critical
    Accounting Policies
    Allowance for Loan Losses.
         42




---



##### Table of Contents



Deferred Income Taxes. Accounting for Income Taxes,
  Asset Impairment Judgments.
   43




---



##### Table of Contents



Stock-Based Compensation.
      Comparison
    of Financial Condition at June 30, 2007 and June 30,
    2006
  Total Assets.
  Securities.
       44




---



##### Table of Contents



Net Loans.
         45




---



##### Table of Contents



and/or
  Deferred Tax Asset.
        Bank Owned Life Insurance, Accrued Interest Receivable and
    Stock in the Federal Home Loan Bank.
  Deposits.
 46




---



##### Table of Contents



Borrowed Funds.
  Stockholders Equity.
  Analysis
    of Net Interest Income
   47




---



##### Table of Contents



Average Balances and Yields.
  For the Years Ended June 30,2007


2006


2005Average


Interest


Average


Average


Interest


Average


Average


Interest


AverageOutstanding


Earned/


Yield/


Outstanding


Earned/


Yield/


Outstanding


Earned/


Yield/Balance


Paid


Rate


Balance


Paid


Rate


Balance


Paid


Rate(Dollars in thousands)Interest-earning
    assets:Interest-bearing deposits

$
19,555


$
692



3.54
%

$
82,677


$
2,863



3.46
%

$
20,162


$
489



2.43
%Repurchase agreements














16,387



613



3.74











Securities available-for-sale(1)


398,329



17,602



4.42



609,265



25,828



4.24



1,190,712



47,408



3.98Securities held-to-maturity


1,623,083



77,631



4.78



1,930,206



87,202



4.52



2,289,520



99,443



4.34Net loans


3,269,196



180,859



5.53



2,427,506



126,613



5.22



1,502,704



76,857



5.11Stock in FHLB


40,106



2,905



7.24



54,834



2,949



5.38



72,388



2,327



3.21Total interest-earning assets


5,350,269



279,689



5.23



5,120,875



246,068



4.81



5,075,486



226,524



4.46Non-interest-earning assets


163,024











135,799











139,856Total assets

$
5,513,293










$
5,256,674










$
5,215,342Interest-bearing
    liabilities:Savings deposits

$
261,992



4,412



1.68


$
330,840



2,820



0.85


$
279,953



2,349



0.84Interest-bearing checking


305,791



7,419



2.43



306,079



6,027



1.97



218,327



2,533



1.16Money market accounts


185,849



3,596



1.93



255,154



3,423



1.34



380,623



5,075



1.33Certificates of deposit


2,668,963



122,844



4.60



2,435,089



84,308



3.46



2,364,399



59,905



2.53Borrowed funds


1,121,697



55,127



4.91



1,115,723



45,218



4.05



1,500,671



56,817



3.79Total interest-bearing liabilities


4,544,292



193,398



4.26



4,442,885



141,796



3.19



4,743,973



126,679



2.67Non-interest-bearing liabilities


84,837











62,803











70,468Total liabilities


4,629,129











4,505,688











4,814,441Stockholders equity


884,164











750,986











400,901Total liabilities and
    stockholders equity

$
5,513,293










$
5,256,674










$
5,215,342Net interest income





$
86,291










$
104,272










$
99,845Net interest rate spread(2)










0.97
%










1.62
%










1.79
%Net interest-earning assets(3)

$
805,977










$
677,990










$
331,513Net interest margin(4)










1.61
%










2.04
%










1.97
%Ratio of interest-earning assets to
    total interest-bearing liabilities


1.18
x










1.15
x










1.07
x     (1)
    
    Securities available-for-sale are stated at amortized cost,
    adjusted for unamortized purchased premiums and discounts.(2)
    
    Net interest rate spread represents the difference between the
    yield on average interest-earning assets and the cost of average
    interest-bearing liabilities.(3)
    
    Net interest-earning assets represent total interest-earning
    assets less total interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by
    average total interest-earning assets. 48




---



##### Table of Contents



Rate/Volume
    Analysis
    Years Ended June 30,


Years Ended June 30,2007 vs. 2006


2006 vs. 2005Increase (Decrease)


Net


Increase (Decrease)


NetDue to


Increase


Due to


IncreaseVolume


Rate


(Decrease)


Volume


Rate


(Decrease)(In thousands)Interest-earning
    assets:Interest-bearing deposits

$
(2,232
)

$
61


$
(2,171
)

$
2,086


$
288


$
2,374Repurchase agreements


(613
)






(613
)


613







613Securities available-for-sale


(9,131
)


905



(8,226
)


(23,464
)


1,884



(21,580
)Securities held-to-maturity


(13,396
)


3,825



(9,571
)


(14,705
)


2,464



(12,241
)Net loans


47,984



6,262



54,246



48,202



1,554



49,756Stock in FHLB


(912
)


868



(44
)


(665
)


1,287



622Total interest-earning assets


21,700



11,921



33,621



12,067



7,477



19,544Interest-bearing
    liabilities:Savings deposits


(687
)


2,279



1,592



433



38



471Interest-bearing checking


(6
)


1,398



1,392



1,278



2,216



3,494Money market accounts


(1,086
)


1,259



173



(1,683
)


31



(1,652
)Certificates of deposit


8,699



29,837



38,536



1,841



22,562



24,403Total deposits


6,920



34,773



41,693



1,869



24,847



26,716Borrowed funds


1,072



8,837



9,909



(15,286
)


3,687



(11,599
)Total interest-bearing liabilities


7,992



43,610



51,602



(13,417
)


28,534



15,117Increase (decrease) in net
    interest income

$
13,708


$
(31,689
)

$
(17,981
)

$
25,484


$
(21,057
)

$
4,427   Comparison
    of Operating Results for the Years Ended June 30, 2007 and
    2006
  Net Income.
  Net Interest Income.
 49




---



##### Table of Contents



Interest and Dividend Income.
      Interest Expense.
      Provision for Loan Losses.
  Non-Interest Income.
 50




---



##### Table of Contents



Non-Interest Expenses.
  Income Taxes.
  Comparison
    of Operating Results for the Years Ended June 30, 2006 and
    2005
  Net Income.
  Net Interest Income.
  Interest and Dividend Income.
   51




---



##### Table of Contents



Interest Expense.
      Provision for Loan Losses.
  Non-Interest Income (Loss).
  Non-Interest Expenses.
  Income Taxes.
 52




---



##### Table of Contents



Management
    of Market Risk
  Qualitative Analysis.
           53




---



##### Table of Contents



Quantitative Analysis.
  Net Portfolio Value(2)


Net Interest IncomeChange in




Estimated Increase


Estimated Net


Increase (Decrease) inInterest Rates

Estimated


(Decrease)


Interest


Estimated Net Interest Income(Basis Points)(1)

NPV


Amount


Percent


Income(3)


Amount


Percent(Dollars in thousands)+200bp

$
463,831


$
(309,201
)


(40.0
)%

$
75,548


$
(11,447
)


(13.16
)%0bp


773,032











86,995







-200bp


930,318



157,286



20.3
%


100,559



13,564



15.59
%     (1)
    
    Assumes an instantaneous uniform change in interest rates at all
    maturities.(2)
    
    NPV is the discounted present value of expected cash flows from
    assets, liabilities and off-balance sheet contracts.(3)
    
    Assumes a gradual change in interest rates over a one year
    period at all maturities      Liquidity
    and Capital Resources
   54




---



##### Table of Contents



12-month
   55




---



##### Table of Contents



Business
  Off-Balance
    Sheet Arrangements and Aggregate Contractual
    Obligations
  Off-Balance Sheet Arrangements.
  Contractual Obligations.
    Payments Due by PeriodLess than


One to Three


Three to Five


More thanContractual Obligations

One Year


Years


Years


Five Years


Total(In thousands)Other borrowed funds(1)

$
233,100


$
100,000


$
610


$



$
333,710Repurchase agreements(1)


240,000



165,000



300,000







705,000Operating leases


3,793



7,914



8,088



19,766



39,561Total

$
476,893


$
272,914


$
308,698


$
19,766


$
1,078,271     (1)
    
    Reflects all debt with an original maturity of longer than one
    year.  Recent
    Accounting Pronouncements
       56




---



##### Table of Contents



Impact of
    Inflation and Changing Prices
     ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK     ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Form 10-K.
   ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE     ITEM 9A.
    CONTROLS
    AND PROCEDURES    Rule 13a-15(e) 15d-15(e)
       ITEM 9B.
    OTHER
    INFORMATION   57




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVENANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION  Directors-Director
  ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
 58




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
            
    59




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Balance Sheets
 June 30,
    2007 and 2006
  2007


2006(In thousands)ASSETSCash and cash equivalents

$
24,810



39,824Securities available-for-sale, at
    estimated fair value (notes 5 and 11)


251,970



528,876Securities held-to-maturity, net
    (estimated fair value of $1,472,385 and $1,695,975 at
    June 30, 2007 and June 30, 2006, respectively)
    (notes 4 and 11)


1,517,664



1,763,032Loans receivable, net (note 6)


3,589,373



2,960,583Loans held-for-sale


3,410



974Stock in the Federal Home Loan
    Bank (note 11)


33,887



46,125Accrued interest receivable
    (note 7)


24,300



21,053Office properties and equipment,
    net (note 9)


27,155



27,911Net deferred tax asset
    (note 12)


39,399



28,176Bank owned life insurance contract
    (note 3)


88,018



78,903Other assets


1,102



1,789$
5,601,088



5,497,246LIABILITIES AND
    STOCKHOLDERS EQUITYLiabilities:Deposits (note 10)

$
3,664,966



3,302,043Borrowed funds (note 11)


1,038,710



1,245,740Advance payments by borrowers for
    taxes and insurance


17,671



15,337Other liabilities


36,376



33,939Total liabilities


4,757,723



4,597,059Stockholders equity
    (notes 2 and 16):Preferred stock, $0.01 par
    value, 50,000,000 authorized shares; none issued






Common stock, $0.01 par
    value, 200,000,000 shares authorized; 116,275,688 issued;
    111,468,952 and 116,275,688 outstanding at June 30, 2007
    and June 30, 2006, respectively


532



532Additional paid-in capital


506,016



524,962Retained earnings


453,751



426,233Treasury stock, at cost;
    4,806,736 shares at June 30, 2007


(70,973
)


Unallocated common stock held by
    the employee stock ownership plan


(38,996
)


(40,414
)Accumulated other comprehensive
    loss


(6,965
)


(11,126
)Total stockholders equity


843,365



900,187Commitments and contingencies
    (notes 8 and 14)Total liabilities and
    stockholders equity

$
5,601,088



5,497,246    60




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Operations
 Years
    ended June 30, 2007, 2006 and 2005
  2007


2006


2005(In thousands, except per share data)Interest and dividend income:Loans receivable and loans
    held-for-sale

$
180,859



126,613



76,857Securities:Government-sponsored enterprise
    obligations


5,355



6,843



5,496Mortgage-backed securities


78,528



97,557



138,210Equity securities
    available-for-sale


1,383



1,825



1,776Municipal bonds and other debt


9,967



6,805



1,369Interest-bearing deposits


692



2,863



489Repurchase agreements






613



Federal Home Loan Bank stock


2,905



2,949



2,327Total interest and dividend income


279,689



246,068



226,524Interest expense:Deposits (note 10)


138,271



96,578



69,862Secured borrowings


55,127



45,218



56,817Total interest expense


193,398



141,796



126,679Net interest income


86,291



104,272



99,845Provision for loan losses
    (note 6)


725



600



600Net interest income after
    provision for loan losses


85,566



103,672



99,245Non-interest income (loss):Fees and service charges


2,600



2,524



2,451Income on bank owned life
    insurance contract (note 3)


3,551



2,674



3,977Gain on sales of mortgage loans,
    net


244



289



406(Loss) gain on securities
    transactions, net (notes 4 and 5)


(3,666
)


5



(9,494
)Gain on sale of other real estate
    owned, net






5



38Other income


114



83



191Total non-interest income (loss)


2,843



5,580



(2,431
)Non-interest expenses:Compensation and fringe benefits
    (note 13)


48,689



41,963



35,695Advertising and promotional expense


3,275



2,502



2,636Office occupancy and equipment
    expense (notes 9 and 14)


9,969



10,306



10,340Federal insurance premiums


437



470



470Stationery, printing, supplies and
    telephone


1,579



1,756



1,711Legal, audit, accounting, and
    supervisory examination fees


1,927



1,746



1,456Data processing service fees


3,929



3,633



3,340Amortization of premium on deposit
    acquisition










1,102Loss on early extinguishment of
    debt (note 11)










43,616Contribution to charitable
    foundation (note 2)






20,651



Other operating expenses


3,768



3,803



2,936Total non-interest expenses


73,573



86,830



103,302Income (loss) before income tax
    (benefit) expense


14,836



22,422



(6,488
)Income tax (benefit) expense
    (note 12)


(7,430
)


7,408



(3,346
)Net income (loss)

$
22,266



15,014



(3,142
)Earnings per share 
    basic and diluted (fiscal 2007 represents a full year, fiscal
    2006 represents the period from October 11, 2005 to
    June 30, 2006) (note 19)

$
0.20



0.06



n/aWeighted average shares outstandingBasic


110,812,975



112,140,953



n/aDiluted


110,831,942



112,140,953



n/a    61




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Stockholders Equity
 Years
    ended June 30, 2007, 2006 and 2005
  UnallocatedCommon


AccumulatedAdditional








Stock


Other


TotalCommon


Paid-in


Retained


Treasury


Held by


Comprehensive


StockholdersStock


Capital


Earnings


Stock


ESOP


Loss


Equity(In thousands)Balance at June 30, 2004

$




25



414,361











(12,723
)


401,663Comprehensive income:Net loss










(3,142
)














(3,142
)Change in minimum pension
    liability, net of tax benefit of $234






















(346
)


(346
)Unrealized gain on securities
    available-for-sale, net of tax expense of $2,307






















3,212



3,212Reclassification adjustment for
    losses included in net income, net of tax of $3,656






















6,440



6,440Total comprehensive income


























6,164Balance at June 30, 2005






25



411,219











(3,417
)


407,827Comprehensive income:Net income










15,014















15,014Change in minimum pension
    liability, net of tax expense of $490






















733



733Unrealized loss on securities
    available-for-sale, net of tax benefit of $5,802






















(8,442
)


(8,442
)Total comprehensive income


























7,305Sale of 53,175,907 shares of
    common stock in the initial public offering and issuance of
    63,099,781 shares to mutual holding company


532



524,642



















525,174Purchase of common stock by the ESOP


















(42,541
)






(42,541
)ESOP shares allocated or committed
    to be released






295











2,127







2,422Balance at June 30, 2006


532



524,962



426,233







(40,414
)


(11,126
)


900,187Comprehensive income:Net income










22,266















22,266Change in minimum pension
    liability, net of tax benefit of $510






















(766
)


(766
)Unrealized gain on securities
    available-for-sale, net of tax expense of $5,967






















8,970



8,970Reclassification adjustment for
    losses on securities available-for-sale included in net income,
    net of tax benefit of $1,347






















(1,951
)


(1,951
)Total comprehensive income


























28,519Cummulative effect of change in
    accounting for bank owned life insurance










5,564















5,564Purchase of treasury stock
    (6,473,695 shares)














(96,706
)










(96,706
)Treasury stock allocated to
    restricted stock plan






(25,421
)


(312
)


25,733











Funded status of postretirement
    plans upon adoption of SFAS No. 158, net of tax
    benefit of $1,395






















(2,092
)


(2,092
)Compensation cost for stock options
    and restricted stock






5,821



















5,821ESOP shares allocated or committed
    to be released






654











1,418







2,072Balance at June 30, 2007

$
532



506,016



453,751



(70,973
)


(38,996
)


(6,965
)


843,365    62




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Consolidated
    Statements of Cash Flows
 Years
    ended June 30, 2007, 2006 and 2005
  2007


2006


2005(In thousands)Cash flows from operating
    activities:Net income (loss)

$
22,266



15,014



(3,142
)Adjustments to reconcile net income
    (loss) to net cash provided by operating activities:Contribution of stock to charitable
    foundation






15,488



ESOP and stock-based compensation
    expense


7,893



2,422



Amortization of premiums and
    accretion of discounts on securities, net


1,552



1,441



5,542Amortization of premium on deposit
    acquisition










1,102Amortization of premium and
    accretion of fees and costs on loans, net


1,852



2,015



1,492Provision for loan losses


725



600



600Depreciation and amortization of
    office properties and equipment


2,777



2,883



2,807Loss (gain) on securities
    transactions, net


3,666



(5
)


9,494Loss on early extinguishment of debt










43,616Mortgage loans originated for sale


(41,887
)


(28,355
)


(53,548
)Proceeds from mortgage loan sales


39,934



31,082



51,970Gain on sales of mortgage loans, net


(244
)


(289
)


(406
)Proceeds from sales of other real
    estate owned






5



315Net gain on sales of other real
    estate owned






(5
)


(38
)Death benefits on bank owned life
    insurance contract










(2,800
)Increase in bank owned life
    insurance contract


(3,551
)


(2,674
)


(1,177
)(Increase) decrease in accrued
    interest receivable


(3,247
)


(2,790
)


4,398Deferred tax benefit


(13,938
)


(9,738
)


(69
)(Increase) decrease in other assets


(180
)


856



570(Decrease) increase in other
    liabilities


(1,459
)


14,022



(18,201
)Total adjustments


(6,107
)


26,958



45,667Net cash provided by operating
    activities


16,159



41,972



42,525Cash flows from investing
    activities:Purchases of loans receivable


(664,384
)


(833,449
)


(857,324
)Net repayments (originations) of
    loans receivable


32,778



(135,845
)


(32,914
)Purchases of mortgage-backed
    securities held-to-maturity


(22,696
)


(64,356
)


(261,064
)Purchases of debt securities
    held-to-maturity


(46,362
)


(346,005
)


(23,000
)Purchases of mortgage-backed
    securities available-for-sale










(62,175
)Proceeds from paydowns/maturities
    on mortgage-backed securities held-to-maturity


279,392



457,351



689,885Proceeds from calls/maturities on
    debt securities held-to-maturity


10,137



229,495



25,351Proceeds from paydowns/maturities
    on mortgage-backed securities available-for-sale


89,170



130,760



242,890Proceeds from sales of
    mortgage-backed securities held-to-maturity


22,942







46,942Proceeds from sales of
    mortgage-backed securities available-for-sale


161,112







550,071Proceeds from sales of equity
    securities available-for-sale










20,729Proceeds from call of equity
    securities available-for-sale


35,000







Proceeds from redemptions of
    Federal Home Loan Bank stock


48,889



87,748



82,376Purchases of Federal Home Loan Bank
    stock


(36,651
)


(73,185
)


(61,074
)Purchases of office properties and
    equipment


(2,021
)


(1,250
)


(5,403
)Proceeds from death benefits on
    bank owned life insurance contract










3,291Net cash (used in) provided by
    investing activities


(92,694
)


(548,736
)


358,581Cash flows from financing
    activities:Net increase (decrease) in deposits


362,923



61,623



(26,515
)Net proceeds from sale of common
    stock






509,686



Loan to ESOP for purchase of common
    stock






(42,541
)


Net (decrease) increase in funds
    borrowed under short-term repurchase agreements


(165,000
)


325,000



Proceeds from funds borrowed under
    other repurchase agreements


360,000



475,000



605,000Repayments of funds borrowed under
    other repurchase agreements


(585,000
)


(930,000
)


(1,027,616
)Net increase in other borrowings


182,970



61,971



87,971Net increase in advance payments by
    borrowers for taxes and insurance


2,334



4,520



3,730Purchase of treasury stock


(96,706
)






Net cash provided by (used in)
    financing activities


61,521



465,259



(357,430
)Net (decrease) increase in cash and
    cash equivalents


(15,014
)


(41,505
)


43,676Cash and cash equivalents at
    beginning of year


39,824



81,329



37,653Cash and cash equivalents at end of
    year

$
24,810



39,824



81,329Supplemental cash flow information:Noncash investing activities:Real estate acquired through
    foreclosure

$








123Cash paid during the year for:Interest


194,304



142,498



127,307Income taxes


9,591



9,052



16,388    63




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial Statements
 Years Ended June 30, 2007, 2006 and 2005
  (1)
    Summary
    of Significant Accounting Policies    (a)
    Basis
    of Presentation        (b)
    Business      (c)
    Cash
    Equivalents    (d)
    Securities     64




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (e)
    Loans
    Receivable, Net          (f)
    Office
    Properties and Equipment, Net   65




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (g)
    Other
    Real Estate Owned    (h)
    Bank
    Owned Life Insurance Contract  06-5 06-5.
  (i)
    Intangible
    Asset    (j)
    Federal
    Home Loan Bank Stock    (k)
    Borrowed
    Funds      (l)
    Income
    Taxes  Accounting for Income Taxes,
 66




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (m)
    Employee
    Benefits    and/or
        No. 93-6,
    (n)
    Earnings
    Per Share     67




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (o)
    Reclassification    (2)
    Stock
    Transactions  Stock
    Offering
    Stock
    Repurchase Programs
    (3)
    Bank
    Owned Life Insurance Contract    06-5, Bulletin No. 85-4
 68




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (4)
    Securities
    Held-to-Maturity    June 30, 2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Debt securities:Government-sponsored enterprises

$
119,900



8



4,233



115,675Municipal bonds


14,048



207



19



14,236Corporate and other debt securities


166,074



592



769



165,897300,022



807



5,021



295,808Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


641,452



506



23,544



618,414Federal National Mortgage
    Association


438,830



748



14,574



425,004Government National Mortgage
    Association


6,049



174



1



6,222Federal housing authorities


3,027



224







3,251Non-agency securities


128,284



39



4,637



123,6861,217,642



1,691



42,756



1,176,577Total securities held-to-maturity

$
1,517,664



2,498



47,777



1,472,385   69




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  June 30, 2006Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Debt securities:Government-sponsored enterprises

$
120,062



12



6,418



113,656Municipal bonds


14,177



226



25



14,378Corporate and other debt securities


130,111



37



409



129,739264,350



275



6,852



257,773Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


808,952



189



33,698



775,443Federal National Mortgage
    Association


527,338



583



20,459



507,462Government National Mortgage
    Association


8,249



203



10



8,442Federal housing authorities


3,189



253







3,442Non-agency securities


150,954







7,541



143,4131,498,682



1,228



61,708



1,438,202Total securities held-to-maturity

$
1,763,032



1,503



68,560



1,695,975       June 30, 2007Amortized


EstimatedCost


Fair Value(In thousands)Due in one year or less

$
1,850



1,863Due after one year through five
    years


66,285



63,829Due after five years through ten
    years


59,163



57,446Due after ten years


172,724



172,670Total

$
300,022



295,808    70




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    June 30, 2007Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Debt securities:Government-sponsored enterprises

$








114,887



4,233



114,887



4,233Municipal bonds










1,474



19



1,474



19Corporate and other debt securities


44,160



528



9,891



241



54,051



76944,160



528



126,252



4,493



170,412



5,021Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


31,288



419



543,293



23,125



574,581



23,544Federal National Mortgage
    Association


54,970



1,012



334,386



13,562



389,356



14,574Government National Mortgage
    Association


581



1











581



1Non-agency securities










115,141



4,637



115,141



4,63786,839



1,432



992,820



41,324



1,079,659



42,756Total

$
130,999



1,960



1,119,072



45,817



1,250,071



47,777   June 30, 2006Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Debt securities:Government-sponsored enterprises

$
27,807



1,193



84,895



5,225



112,702



6,418Municipal bonds










1,596



25



1,596



25Corporate and other debt securities


53,041



409











53,041



40980,848



1,602



86,491



5,250



167,339



6,852Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


243,314



5,744



522,465



27,954



765,779



33,698Federal National Mortgage
    Association


206,292



5,447



265,759



15,012



472,051



20,459Government National Mortgage
    Association


929



7



320



3



1,249



10Non-agency securities


32,326



1,335



111,087



6,206



143,413



7,541482,861



12,533



899,631



49,175



1,382,492



61,708Total

$
563,709



14,135



986,122



54,425



1,549,831



68,560  71




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (5)
    Securities
    Available-for-Sale    June 30, 2007Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation

$
68,635



15



1,427



67,223Federal National Mortgage
    Association


70,059



162



1,365



68,856Non-agency securities


119,598







3,707



115,891Total securities available-for-sale

$
258,292



177



6,499



251,970   June 30, 2006Gross


GrossAmortized


Unrealized


Unrealized


EstimatedCost


Gains


Losses


Fair Value(In thousands)Equity securities

$
35,000



35







35,035Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation


124,845



14



4,095



120,764Federal National Mortgage
    Association


208,545







6,751



201,794Non-agency securities


178,446







7,163



171,283511,836



14



18,009



493,841Total securities available-for-sale

$
546,836



49



18,009



528,876      72




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      June 30, 2007Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation

$








50,031



1,427



50,031



1,427Federal National Mortgage
    Association










49,858



1,365



49,858



1,365Non-agency securities










115,891



3,707



115,891



3,707Total

$








215,780



6,499



215,780



6,499   June 30, 2006Less than 12 Months


12 Months or More


TotalEstimated


Unrealized


Estimated


Unrealized


Estimated


UnrealizedFair Value


Losses


Fair Value


Losses


Fair Value


Losses(In thousands)Mortgage-backed securities:Federal Home Loan Mortgage
    Corporation

$
6,608



87



105,129



4,008



111,737



4,095Federal National Mortgage
    Association


92,580



2,549



109,214



4,202



201,794



6,751Non-agency securities


47,079



1,551



124,204



5,612



171,283



7,163Total

$
146,267



4,187



338,547



13,822



484,814



18,009    73




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (6)
    Loans
    Receivable, Net    June 30,2007


2006(In thousands)Residential mortgage loans:One- to four-family

$
3,134,690



2,646,056FHA


18,522



20,503Multi-family and commercial


107,350



76,976Construction loans


152,670



65,459Consumer and other loans


161,395



139,336Total loans


3,574,627



2,948,330Premiums on purchased loans


23,587



20,327Deferred loan fees, net


(1,924
)


(1,734
)Allowance for loan losses


(6,917
)


(6,340
)$
3,589,373



2,960,583       Year Ended June 30,2007


2006


2005(In thousands)Balance at beginning of year

$
6,340



5,694



5,193Loans charged off


(151
)


(153
)


(125
)Recoveries


3



199



26Net charge-offs


(148
)


46



(99
)Provision for loan losses


725



600



600Balance at end of year

$
6,917



6,340



5,694     No. of Loans


Amount(In thousands)June 30, 2007


35


$
5,149June 30, 2006


31



3,299June 30, 2005


64



7,865    74




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (7)
    Accrued
    Interest Receivable    June 30,2007


2006(In thousands)Securities

$
8,507



10,110Loans receivable


15,793



10,943$
24,300



21,053   (8)
    Financial
    Transactions with Off-Balance-Sheet Risk and Concentrations of
    Credit Risk      case-by-case
  and/or
   75




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (9)
    Office
    Properties and Equipment, Net    June 30,2007


2006(In thousands)Land

$
5,458



5,458Office buildings


11,247



11,247Leasehold improvements


13,634



13,626Furniture, fixtures and equipment


16,451



16,907Construction in process


1,004



47047,794



47,708Less accumulated depreciation and
    amortization


20,639



19,797$
27,155



27,911     (10)
    Deposits    June 30,2007


2006Weighted





%


Weighted





%Average





of


Average





ofRate


Amount


Total


Rate


Amount


Total(Dollars in thousands)Savings


2.30
%

$
320,880



8.76
%


0.83
%

$
226,245



6.85
%Checking accounts


2.39



388,215



10.59



2.08



349,014



10.57Money market deposits


2.37



182,274



4.97



1.56



212,200



6.43Total transaction accounts


2.35



891,369



24.32



1.58



787,459



23.85Certificates of deposit


5.06



2,773,597



75.68



4.06



2,514,584



76.154.40
%

$
3,664,966



100.00
%


3.47
%

$
3,302,043



100.00
%  76




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    June 30, 2007(In thousands)Within one year

$
2,338,658One to two years


331,721Two to three years


53,834Three to four years


7,786After four years


41,598$
2,773,597       Year Ended June 30,2007


2006


2005(In thousands)Savings

$
4,412



2,820



2,349Checking accounts


7,419



6,027



2,533Money market deposits


3,596



3,423



5,075Certificates of deposit


122,844



84,308



59,905$
138,271



96,578



69,862   (11)
    Borrowed
    Funds    June 30,2007


2006Weighted





WeightedAverage





AveragePrincipal


Rate


Principal


Rate(Dollars in thousands)Funds borrowed under repurchase
    agreements:FHLB

$
305,000



4.57
%

$
670,000



4.48
%Other brokers


400,000



4.94



425,000



5.02Total funds borrowed under
    repurchase agreements


705,000



4.78



1,095,000



4.69Other borrowed funds:FHLB advances


233,710



5.44



150,740



5.36Other brokers


100,000



5.38







Total other borrowed funds


333,710



5.42



150,740



5.36Total borrowed funds

$
1,038,710



4.98


$
1,245,740



4.77  77




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    June 30,2007


2006Weighted





WeightedAverage





AveragePrincipal


Rate


Principal


Rate(Dollars in thousands)Within one year

$
473,100



5.09
%

$
850,000



4.88
%One to two years


165,000



4.66



80,104



3.62Two to three years


100,000



5.08



65,000



3.85Three to four years


250,000



5.00







Four to five years


50,610



4.77



250,000



5.00After five years










636



1.25Total borrowed funds

$
1,038,710



4.98


$
1,245,740



4.77       June 30,2007


2006(In thousands)Amortized cost of collateral:Debt securities

$
95,120



Mortgage-backed securities


802,177



1,230,119Total amortized cost of collateral

$
897,297



1,230,119Fair value of collateral:Debt securities

$
91,595



Mortgage-backed securities


776,039



1,179,806Total fair value of collateral

$
867,634



1,179,806       12-month
   78




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (12)
    Income
    Taxes    Year Ended June 30,2007


2006


2005(In thousands)Current tax expense (benefit):Federal

$
5,143



15,755



(4,179
)State


1,365



1,391



9026,508



17,146



(3,277
)Deferred tax expense (benefit):Federal


6,625



(9,584
)


(25
)State


(20,563
)


(154
)


(44
)(13,938
)


(9,738
)


(69
)Total income tax (benefit) expense

$
(7,430
)


7,408



(3,346
)     Year Ended June 30,2007


2006


2005(In thousands)Expected federal
    income tax expense (benefit)

$
5,193



7,848



(2,271
)State tax, net


(12,479
)


804



558Bank owned life insurance


(1,243
)


(936
)


(1,392
)Change in valuation allowance for
    federal deferred tax assets


1,075







401Dividend received deduction


(339
)


(447
)


(435
)Other


363



139



(207
)Total income tax (benefit) expense

$
(7,430
)


7,408



(3,346
)  79




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    June 30,2007


2006(In thousands)Deferred tax asset:Employee benefits

$
13,440



7,307Deferred compensation


641



1,378State net operating loss
    (NOL) carryforwards


9,885



6,939Intangible assets


1,360



1,890Allowance for loan losses


2,625



2,059Net unrealized loss on securities
    available-for-sale


2,582



7,203New Jersey alternative minimum
    assessment


2,724



2,750Capital losses on equity securities


1,732



1,732Contribution to charitable
    foundation


7,467



8,513Federal NOL carryforwards






652ESOP shares allocated


1,448



869Other


1,079



1,416Gross deferred tax asset


44,983



42,708Valuation allowance


(3,947
)


(12,624
)41,036



30,084Deferred tax liability:Discount accretion


366



443Premises and equipment,
    differences in depreciation


53



427ESOP loan amortization


1,218



1,038Gross deferred tax liability


1,637



1,908Net deferred tax asset

$
39,399



28,176    80




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
        (13)
    Benefit
    Plans  Defined
    Benefit Pension Plan
    SERP,
    Directors Plan and Other Postretirement Benefits
    Plan
    Before Adoption of





After Adoption ofSFAS No. 158


Adjustments


SFAS No. 158(In thousands)Net deferred tax asset

$
38,004


$
1,395


$
39,399Other Assets


1,883



(781
)


1,102Total assets


5,600,474



614



5,601,088Other liabilities


33,670



2,706



36,376Total liabilities


4,755,017



2,706



4,757,723Accumulated other comprehensive
    loss


4,873



2,092



6,965Total stockholders equity


845,457



(2,092
)


843,365  81




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    SERP and Directors Plan


Other BenefitsJune 30,


June 30,2007


2006


2007


2006(In thousands)Change in benefit obligation:Benefit obligation at beginning of
    year

$
15,711


$
14,351


$
8,596


$
11,805Service cost


1,184



1,381



159



196Interest cost


898



801



539



497Amendment to plan


(877
)


976







Actuarial (gain) loss


365



(1,048
)


173



(3,631
)Benefits paid


(750
)


(750
)


(319
)


(271
)Benefit obligation at end of year

$
16,531


$
15,711


$
9,148


$
8,596Funded status

$
(16,531
)

$
(15,711
)

$
(9,148
)

$
(8,596
)     SERP and


OtherDirectors Plan


Benefits(In thousands)Prior service cost

$
113


$
Net obligation






1,607Net actuarial loss


2,918



739Total amounts recognized in
    accumulated other comprehensive loss

$
3,031


$
2,346  82




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    SERP and


OtherDirectors Plan


Benefits(In thousands)Funded status

$
(15,711
)

$
(8,596
)Unrecognized prior service cost


1,008



Unrecognized net obligation






1,808Unrecognized net actuarial loss


2,703



565Net amount recognized

$
(12,000
)

$
(6,223
)Components of net amount
    recognized:Accrued benefit liability

$
(13,480
)

$
(6,223
)Intangible asset


867



Accumulated other comprehensive
    loss (pre-tax)


613



Net amount recognized

$
(12,000
)

$
(6,223
)       SERP and Directors Plan


Other Benefits2007


2006


2007


2006Discount rate


6.25
%


6.25
%


6.25
%


6.25
%Rate of compensation increase


5.05



6.82







     SERP and Directors Plan


Other BenefitsYears Ended June 30,


Years Ended June 30,2007


2006


2005


2007


2006


2005(In thousands)Service cost

$
1,184


$
1,381


$
729


$
159


$
196


$
217Interest cost


898



801



751



539



497



572Amortization of:Prior service cost


19



186



89











Transition obligation














200



201



201Net loss


150



325



199







94



86Total net periodic benefit cost

$
2,251


$
2,693


$
1,768


$
898


$
988


$
1,076  83




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    SERP andDirectors Plan


Other BenefitsYears Ended June 30,


Years Ended June 30,2007


2006


2005


2007


2006


2005Discount rate


6.25
%


5.25
%


6.25
%


6.25
%


5.25
%


6.25
%Rate of compensation increase


6.82



7.21



6.60











     1% Increase


1% Decrease(In thousands)Effect on:Total service and interest cost

$
125


$
(100
)Postretirement benefit obligations


1,508



(1,216
)     SERP andDirectors Plan


Other Benefits(In thousands)2008

$
3,753


$
3312009


1,268



3662010


1,357



3922011


1,306



4102012


1,288



4502013 through 2017


7,402



2,700     401(k)
    Plan
    Employee
    Stock Ownership Plan
     84




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Equity
    Incentive Plan
      7-year
     85




---



##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    WeightedNumber of


AverageShares


Grant DateAwarded


Fair ValueNon-vested at June 30, 2006






Granted


1,666,959


$
15.25Vested






Forfeited






Non-vested at June 30, 2007


1,666,959


$
15.25       WeightedWeighted


AverageNumber of


Average


Remaining

AggregateStock


Exercise


Contractual

IntrinsicOptions


Price


Life

ValueOutstanding at June 30, 2006






Granted


4,447,401


$
15.26Exercised






Forfeited


(10,000
)


15.35Outstanding at June 30, 2007


4,437,401


$
15.26


9.4 years

$
Exercisable at June 30, 2007









N/A


N/A     2007Expected dividend yield


0.86
%Expected volatility


17.81
%Risk-free interest rate


4.58
%Expected option life


6.5 years     (14)
    Commitments
    and Contingencies   86




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ending June 30,

Amount(In thousands)2008

$
3,7932009


3,9062010


4,0082011


4,0572012


4,031Thereafter


19,766$
39,561   (15)
    Fair
    Value of Financial Instruments  Disclosures about Fair Value of
    Financial Instruments,
  Cash
    and Cash Equivalents
    Securities
    FHLB
    Stock
  and/or
  Loans
         87




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Deposit
    Liabilities
    Commitments
    to Extend Credit
      June 30,2007


2006Carrying





Carryingamount


Fair value


amount


Fair value(In thousands)Financial assets:Cash and cash equivalents

$
24,810



24,810



39,824



39,824Securities available-for-sale


251,970



251,970



528,876



528,876Securities held-to-maturity


1,517,664



1,472,385



1,763,032



1,695,975Stock in FHLB


33,887



33,887



46,125



46,125Loans


3,592,783



3,444,884



2,961,557



2,803,581Financial liabilities:Deposits


3,664,966



3,654,663



3,302,043



3,277,131Borrowed funds


1,038,710



1,031,764



1,245,740



1,231,908   Limitations
     88




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (16)
    Regulatory
    Capital          Minimum RequirementsTo be Well CapitalizedFor Capital


Under Prompt CorrectiveActual


Adequacy Purposes


Action ProvisionsAmount


Ratio


Amount


Ratio


Amount


Ratio(Dollars in thousands)As of June 30,
    2007:Total capital (to risk-weighted
    assets)

$
693,404



25.0
%

$
221,924



8.0
%

$
277,405



10.0
%Tier I capital (to
    risk-weighted assets)


686,487



24.8



110,962



4.0



166,443



6.0Tier I capital (to average
    assets)


686,487



12.5



219,738



4.0



274,673



5.0As of June 30,
    2006:Total capital (to risk-weighted
    assets)

$
663,141



26.5
%

$
200,354



8.0
%

$
250,443



10.0
%Tier I capital (to
    risk-weighted assets)


656,801



26.2



100,177



4.0



150,266



6.0Tier I capital (to average
    assets)


656,801



12.3



214,446



4.0



268,057



5.0  89




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (17)
    Parent
    Company Only Financial Statements    Balance
    Sheets
  June 30,2007


2006(In thousands)Assets:Cash and due from bank

$
120,833



211,794Investment in subsidiary


682,749



646,910ESOP loan receivable


39,558



39,999Other assets


9,345



1,851Total Assets

$
852,485



900,554Liabilities and Stockholders
    Equity:Total liabilities

$
9,120



367Total stockholders equity


843,365



900,187Total Liabilities and
    Stockholders Equity

$
852,485



900,554   Statements
    of Operations
  Year Ended June 30,2007


2006


2005(In thousands)Income:Interest on ESOP loan receivable





$
3,082



2,087



Interest on deposit with subsidiary






2,929



3,549



6,011



5,636



Expenses:Contribution to charitable
    foundation










20,651



Interest expense on stock
    subscriptions










711



Other expenses






798



350



798



21,712



Income (loss) before income tax
    expense






5,213



(16,076
)


Income tax expense






1,168



346



Income (loss) before undistributed
    earnings of subsidiary






4,045



(16,422
)


Equity in undistributed earnings
    (loss) of subsidiary






18,221



31,436



(3,142
)Net income (loss)





$
22,266



15,014



(3,142
)  90




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Statements
    of Cash Flows
  Year Ended June 30,2007


2006


2005(In thousands)Cash flows from operating
    activities:Net income (loss)

$
22,266



15,014



(3,142
)Adjustments to reconcile net
    income (loss) to net cash provided by (used in) operating
    activities:Equity in (undistributed earnings)
    loss of subsidiary


(18,221
)


(31,436
)


3,142Contribution of stock to
    charitable foundation






15,488



Increase in other assets


(7,494
)


(1,851
)


Increase in other liabilities


8,753



367



Net cash provided by (used in)
    operating activities


5,304



(2,418
)


Cash flows from investing
    activities:Capital contribution to subsidiary






(255,500
)


Loan to ESOP






(42,541
)


Principal collected on ESOP loan


441



2,542



Net cash provided by (used in)
    investing activities


441



(295,499
)


Cash flows from financing
    activities:Proceeds from stock offering, net






509,686



Purchase of treasury stock


(96,706
)






Cash (used in) provided by
    financing activities


(96,706
)


509,686



Net change in cash and due from
    bank


(90,961
)


211,769



Cash and due from bank at
    beginning of year


211,794



25



25Cash and due from bank at end of
    year

$
120,833



211,794



25  91




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (18)
    Selected
    Quarterly Financial Data (Unaudited)    Fiscal 2007 Quarter EndedSeptember 30


December 31


March 31


June 30(In thousands, except per share data)Interest and dividend income

$
69,031



69,973



69,298



71,387Interest expense


46,564



48,979



47,668



50,187Net interest income


22,467



20,994



21,630



21,200Provision for loan losses


225



100



200



200Net interest income after
    provision for loan losses


22,242



20,894



21,430



21,000Other income


1,559



(2,191
)


1,710



1,765Operating expenses


17,087



18,247



19,104



19,135Income before income tax expense
    (benefit)


6,714



456



4,036



3,630Income tax expense (benefit)


2,363



(11,564
)


1,042



729Net income

$
4,351



12,020



2,994



2,901Basic earnings per common share

$
0.04



0.11



0.03



0.03Diluted earnings per common share


0.04



0.11



0.03



0.03   Fiscal 2006 Quarter EndedSeptember 30


December 31


March 31


June 30(In thousands, except per share data)Interest and dividend income

$
57,200



61,925



61,901



65,042Interest expense


32,634



34,196



34,530



40,436Net interest income


24,566



27,729



27,371



24,606Provision for loan losses


100



100



200



200Net interest income after
    provision for loan losses


24,466



27,629



27,171



24,406Other income


589



2,014



1,358



1,619Operating expenses


15,599



37,562



16,857



16,812Income (loss) before income tax
    expense (benefit)


9,456



(7,919
)


11,672



9,213Income tax expense (benefit)


3,495



(2,980
)


3,960



2,933Net income (loss)

$
5,961



(4,939
)


7,712



6,280Basic (loss) earnings per common
    share

$
n/a



(0.06
)


0.07



0.06Diluted earnings per common share


n/a



n/a



0.07



0.06  92




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (19)
    Earnings
    Per Share    For the Year Ended June 30, 2007Income


Shares


Per Share Amount(Dollars in thousands, except per share data)Net Income

$
22,266Basic earnings per share:Income attributable to common
    stockholders

$
22,266



110,812,975


$
0.20Effect of dilutive common stock
    equivalents






18,967Diluted earnings per share:Income attributable to common
    stockholders

$
22,266



110,831,942


$
0.20     (20)
    Recent
    Accounting Pronouncements         93




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##### Table of Contents



INVESTORS
    BANCORP, INC. AND SUBSIDIARY
  Notes to
    Consolidated Financial
    Statements  (Continued)
      (21)
    Subsequent
    Events (unaudited)   94




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##### Table of Contents



Financial Statement Schedules
    Exhibits
  3
.1

Certificate of Incorporation of
    Investors Bancorp, Inc.*3
.2

Bylaws of Investors Bancorp, Inc.*4


Form of Common Stock Certificate
    of Investors Bancorp, Inc.*10
.1

Form of Employment Agreement*10
.2

Form of Change in Control
    Agreement*10
.3

Investors Savings Bank Director
    Retirement Plan*10
.4

Investors Savings Bank
    Supplemental ESOP and Retirement Plan*10
.5

Investors Savings Bank Executive
    Supplemental Retirement Wage Replacement Plan*10
.6

Investors Savings Bank Deferred
    Directors Fee Plan*10
.7

Investors Bancorp, Inc. Deferred
    Directors Fee Plan*14


Code of Ethics**21


Subsidiaries of Registrant*31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200231
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 200232


Certification of Chief Executive
    Officer and Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002     *
    
    Incorporated by reference to the Registration Statement on
    Form S-1
    of Investors Bancorp, Inc. (file
    no. 333-125703),
    originally filed with the Securities and Exchange Commission on
    June 10, 2005.**
    
    Available on our website www.isbnj.com 95




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##### Table of Contents



SIGNATURES    INVESTORS BANCORP, INC.
  By:
    /s/  Robert
    M. Cashill           Signatures

Title

Date/s/  Robert
    M. CashillRobert
    M. Cashill

Chief Executive Officer and
    President (Principal Executive Officer)

August 29, 2007/s/  Domenick
    A. CamaDomenick
    A. Cama

Executive Vice President and
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

August 29, 2007/s/  Doreen
    R. ByrnesDoreen
    R. Byrnes

Director

August 29, 2007/s/  Brian
    D. DittenhaferBrian
    D. Dittenhafer

Director

August 29, 2007/s/  Patrick
    J. GrantPatrick
    J. Grant

Director, Chairman

August 29, 2007/s/  John
    A. KirkpatrickJohn
    A. Kirkpatrick

Director

August 29, 2007/s/  Vincent
    D.
    Manahan, IIIVincent
    D. Manahan, III

Director

August 29, 2007/s/  Joseph
    H. Shepard IIIJoseph
    H. Shepard III

Director

August 29, 2007/s/  Rose
    SiglerRose
    Sigler

Director

August 29, 2007/s/  Stephen
    J. SzabatinStephen
    J. Szabatin

Director

August 29, 2007  96